Activision Q2 - Record digital sales, more Black Ops DLC
Activision Blizzard has announced better-than-expected financial results for Q2 of 2011 with $335 million in profit and net revenues of $1.1 billion, which is a 66 percent increase on Q2 2010's $967 million.
The company delivered record net revenues from digital channels, representing a 27 percent increase year-over-year, and accounting for 37 percent of the company's total net revenues bringing in $423 million with $660 million in retail sales, which is a record 37 percent revenue growth.
"Our better-than-expected second-quarter performance was driven by record digital sales of our online-enabled franchises, said CEO Bobby Kotick. "For the six month period, net revenues from digital channels grew more than 20 percent, driving record operating margin and EPS growth of more than 50 percent.
"Looking to the balance of the year, while we have numerous releases we believe our audiences will be especially excited by three key properties Call of Duty: Modern Warfare 3, our new online service Call of Duty Elite and Skylanders Spyro's Adventure, all of which are shaping up to be incredible.
"To date, pre-orders for Modern Warfare 3 have significantly exceeded the pre-orders for Black Ops at this time last year. In addition, we believe that Call of Duty Elite, which was built for Modern Warfare 3 and is expected to launch with the game on November 8, should redefine social connectivity for multiplayer gaming. Additionally, we expect that Skylanders Spyro's Adventure will change the way we look at toys and video games by bringing the world of toys, video games and the Internet together in an unprecedented way.
"Today, there are more ways than ever for players to access entertainment online and play games which have truly become one of the most compelling forms of entertainment in the world."
Activision CFO Thomas Tippl said the firm expects $1.8 billion in revenue for calender year, and revenue of $650 million for the September quarter.
The only game to be released during that time will be X-Men: Destiny, which releases on September 27.
Publishing CEO Eric Hirshberg noted the hardware installed base which stands at 268 million "is growing, but more money is being spent on must-have games," so the firm will continue to focus on "innovation, more modes and stickier universes in new and existing franchises."
The firm expects the installed base to increase by 44 million during the current year, reaching a total of 312 million by the end of December 2011. The firm estimates that the installed bases for Xbox 360, PS3 and Wii are currently at 43, 31, and 64 million, respectively, with handhelds currently at an installed base of 130 million
Black Ops: Rezurrection and MW3
A new map pack is heading to Black Ops called Rezurrection, at least it's new to those who didn't get the code in the Hardened or Prestige Edition of the game. It is set for release on August 23 on Xbox Live for 1200 MS points, with PC and PS3 getting it at a later date.
"Pre-orders for Modern Warfare 3 have significantly exceeded the pre-orders for Black Ops at this time last year."
The pack contains the new Moon level, four re-mastered levels of Zombie lore: Nacht der Untoten, Verruckt, Shi No Numa and Der Riese, the Zombie factory that started it all, an enhanced Zombies Soundtrack including three tracks never before available for purchase, and a new Zombies Moon theme.
Activison's Eric Hirshberg also highlighted during the call to investors that Call of Duty: Black Ops was the number one game in the US and Europe for the first half of 2011, and to date, Black Ops players have logged more than 2.2 billion hours of online gameplay.
Total unique online gamers playing Black Ops were more than 30 percent greater than the total unique online gamers who played Modern Warfare 2 during the first eight months after each game's release.
Black Ops digital content First Strike, Esscalation and Annihilation sold 14 million units in DLC, which is up 40 percent compared to MW2.
Compared to Facebook games, more people play Black Ops and spend more money on DLC than than any Facebook game and user spend on conjunctive micro-transactions. The percentage of Black Ops players is also higher than any Facebook game as well.
A Wii Sku for MW3 will be released this year, Hirshberg promised, and all of those who attend the firm's Call of Duty XP event in September will be handed a free code for the game's Hardened Edition.
Hirshberg also highlighted Modern Warfare 3's Spec Ops mode, calling it the "third leg on the stool" of the franchise. He said with the game running at 60fps, it was the game's "secret sauce," and because of this, it will be the "best shooter across all platforms."
Elite will provide 24/7 online entertainment
Touching upon Call of Duty: Elite, Hirshberg said it was all part of Activision's plan to have an "always connected" way to develop a long-term relationships with consumers, while providing a 24/7 online entertainment services via online platforms.
"We believe Elite will reset bar for multiplayer and create a large connected community," he said. "Many features will be free and will be superior to any free service in the industry and will be a first when offering many new innovations.
"For premium members, all DLC will be free and the service will give unprecedented control over multiplayer experience while creating a social service allowing users to find others via their likes, interests and affiliation and allowing custom perks and weapons to be added to the menus through various platforms and mobile."
For those who do not wish to participate in Elite, Hirshberg said the Call of Duty "out of the box experience will be the same as ever."
The beta for the service, which launched on July 14, has seen over 3 million registrants.
During the holiday season, Activision plans to launch its "biggest retail campaign ever" to draw attention to both Modern Warfare 3 and Call of Duty: Elite.
Blizzard: WoW subs down, SCII Starter edition
For Q2, Blizzard Entertainment had two top-10 PC titles with World of Warcraft: Cataclysm and StarCraft II: Wings of Liberty and sales were up year-over-year for the first half of the firm's fiscal year to $313 million compared to $299 million year-over-year, due to Cataclysm sales and the release of the expansion in China.
Mike Morahime, president and a co-founder of Blizzard, said the firm saw a decrease in subscriptions to 11.1 million during Q2, but since the new starter edition of the game which allows players to play unhindered up to level 20, the firm has seen a significant increase in new accounts.
"As our players become more experienced playing over the years, they have become much better and faster at consuming content, and with Cataclysm they were able to consume the content faster than previous expansions, and that's why we're working on the development of more content," he said.
He said the new content update will include new raids and content which he believes "will keep things fresh for current players and give lapsed players a reason to come back."
"We are still working hard to ship [Diablo 3] before the end of the year, but we are not ready to commit to a release date at this time."
Subs seem to be driven by seasons, and it is normal to see declines between content updates, and the next update will hit later this year. The update is rumored, thanks to a trademark filing, to be set in Pandaria which is home to the Pandaren race.
Morhaime said the firm is working hard on getting Diablo 3 ready for a release by the end of the year, but it "will still not commit to a release date."
"The timing on the Diablo 3 release date will come down to a lot of moving parts in putting out a complex release. We talked about the new auction house technology which has not been fully tested. We're not yet in beta, and it's just going to come down to when the game is ready for primetime. So, we'll know more when we hit beta and when we've put some of these new systems into test.
"It's a brand new infrastructure with a lot of moving parts."
The beta for the game is still on track for launch this quarter.
For StarCraft II, Morhaime highlighted the Starter Edition for it, which is basically a larger demo than the one currently on the market.
Similar to the one for WoW, it includes the first four missions of the single-player campaign, ability to play as the Terran race in user created maps, the first two Tactical Command and Covert Ops missions, and access to four custom maps. Any achievements earned will carry over into the full game upon purchase.